In a deal worth approximately $440 million in cash and around $60 million in deferred consideration and assumed compensation to founders and employees, F5 has stated that it will acquire all issued and outstanding shares of Volterra.
With the boards of directors of both F5 and Volterra approving the deal, subject to regulatory approvals and other customary closing conditions, the transaction is expected to close in the first quarter of calendar year 2021.
Using the edge-as-a-service provider’s capabilities, F5 is looking to build a security-first, app-driven edge platform for enterprises and service providers.
Along with improved security in place of commodity security added to a content delivery network (CDN) or the cloud, the platform will be based on containers and APIs, in an aim to remove complications that can come with multi-cloud deployment.
The new offering also looks to break apps out of its “CDN jail”, by running all services on any server, across all clouds and data centres.
With this acquisition, F5 raised its Horizon 2 (fiscal years 2021 and 2022) and long-term revenue outlook, as well as reiterating its commitment to return $1 billion of capital over the next two years, which includes the initiation of a $500 million accelerated share repurchase in fiscal year 2021.
Additionally, in its Q1 2021 preview, F5 declared expectations of GAAP and non-GAAP revenue in a range of $623-626 million, driven in part by approximately 68% GAAP, and 70% non-GAAP, software revenue growth.
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“Current edge solutions are simply inadequate for today’s enterprise customers,” said François Locoh-Donou, president and CEO of F5.
“It’s time to break out of closed edge systems that only perpetuate the pain of building, running, and securing apps.”
“With Volterra, we advance our Adaptive Applications vision with an Edge 2.0 platform that solves the complex multi-cloud reality enterprise customers confront. Our platform will create a SaaS solution that solves our customers’ biggest pain points.
“The success of F5’s software transformation has put us in a position to deliver on the potential of Edge 2.0 and redefine our competitive position.”
Ankur Singla, founder and CEO of Volterra, commented: “I am excited to work closely alongside François and the F5 team to help pioneer the evolution of the edge to deliver more adaptive, dynamic application experiences for all of our customers.
“With our platform, we will extend F5’s application security leadership to the edge, thereby expanding our combined reach in the fastest growing segment of F5’s $28 billion 2023 total addressable market.”
Upon its completion, Volterra CEO Singla, along with the rest of its leadership team, are set to join F5 in key management roles.